WASHINGTON–The CFPB said it plans to do little to enforce two rules: its rule around BNPL loans, and its rule around Equal Credit Opportunity Act (ECOA) small-business loan data collection.

With the former, the Bureau said it will not take action on the basis of the Truth in Lending (Regulation Z); Use of Digital User Accounts to Access Buy Now, Pay Later Loans, 89 Fed. Reg. 47,068, which it announced May 31, 2024). It said it is “further contemplating” taking action to rescind its rules around BNPL.

Instead the Bureau said it will keep its enforcement and supervision resources focused on “pressing threats to consumers, particularly servicemen and veterans.”

“The Bureau takes this step in the interest of focusing resources on supporting hard-working American taxpayers, servicemen, veterans, and small businesses,” it said.

Deprioritizing Small Biz Data Collection

The Bureau said that in light of a stay imposed under Texas Bankers Association v. CFPB, the agency “will not prioritize enforcement of supervision actions with regard to entities that are currently outside the stay.”

In language similar to that used with the BNPL rule announcement, it said, “The Bureau takes this step in the interest of focusing resources on supporting hard-working American taxpayers, servicemen, veterans, and small businesses. Even absent resource constraints, the Bureau would deprioritize enforcement of this rule because of the unfairness of enforcing it against entities not protected by the court’s stay but similarly situated to parties that are protected by the stay.”

About the Rule

The rule, which was included in the Bureau’s Regulation B (Equal Credit Opportunity Act, or ECOA), implements section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), was published May 31, 2023. It  has a tiered compliance schedule that is based on an institution’s level of involvement in covered loans, with compliance to be phased in by Jan. 1, 2026.

According to the CFPB,  financial institutions that originated at least 100 covered credit transactions for small businesses in each of the two preceding calendar years are required to collect and report to the CFPB data on applications for credit for small businesses, including those that are owned by women or minorities. 

Credit union trade groups had opposed the rule, arguing the data collection was burdensome.